Biotech Pharmaxis will transition to a strategic business plan with an increased focus on innovation and partnering in order to generate value.
The new direction follows two years of restructuring that included partnering the Pharmaxis lead product, Bronchitol, in major markets worldwide, as well as cutting the company’s expense base and employee numbers, and the sale of an early stage drug asset to Germany’s Boehringer Ingelheim in a deal worth up to $750 million.
The drug, referred to as PXS4728A, is being developed for the treatment of the liver related condition non-alcoholic steatohepatitis (NASH).
NASH is the progressive form of non-alcoholic fatty liver disease, which is the most common liver disorder in western industrialised nations.
NASH is regarded as a major cause of cirrhosis of the liver.
The high prevalence of type two diabetes and obesity, which can lead to NASH and other non-alcoholic fatty liver diseases, is expected to make NASH potentially the most common cause of advanced liver conditions in coming decades.
Pharmaxis will receive an upfront payment of €27.5 million in the deal with Boehringer.
It also will receive up to €55 million in milestone payments tied to phase II and phase III clinical trials, and up to €140 million in milestone payments related to marketing, regulatory, and pricing approvals.
Pharmaxis can also qualify for other milestone payments.
Boehringer will be responsible for all development, regulatory, manufacturing, and commercialisation activities.
Gary Phillips, Pharmaxis CEO, said restructuring and withdrawing from a direct commercial presence in global markets, while preserving value and creating the foundations for future growth, has been a significant challenge.
“We have now put Bronchitol on a path to profitability and reduced our cash burn in order to focus on earlier stage development projects such as the SSAO and LOXL2 inhibitor programs. ”
Pharmaxis chairman, Malcolm McComas, said the transaction with Boehringer represents a new chapter for Pharmaxis.
“By more than doubling our cash reserves it also gives us the opportunity to realise significant value for shareholders, not only from the PXS4728A deal, but also Bronchitol and our research pipeline.”
